Argos and Dixons get tablet, Xbox One & PS4 boost

DEMAND for tablet computers is forecast to have driven sales growth once more at Argos and Dixons Retail over the crucial Christmas period.

A woman browsing Dixons' Currys website on a tablet. Picture: PA
A woman browsing Dixons' Currys website on a tablet. Picture: PA

Following five consecutive quarters of rising sales, Argos is expected to maintain its record for like-for-like sales growth when the retailer posts its third-quarter figures on Thursday.

Tablets and computer game consoles are predicted to have boosted sales growth to 2.5 per cent – an improvement on the 2.3 per cent reported in its first half – following the launch of Sony’s PlayStation 4 and Microsoft’s Xbox One.

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Argos, which is owned by Home Retail Group, also launched its own-brand tablet called MyTablet, priced at less than £100 to capitalise on the broadening appeal of the portable computers.

Analysts at UBS predict sales of tablets and game consoles could have risen by around 50 per cent over the Christmas period, although the higher sales of less-profitable consumer electronics are expected to have hit margins.

Numis Securities said the third-quarter results will be “critical” for the full-year performance at Argos, given that it represents 44 per cent of annual sales.

It is also an important quarter for sister firm Homebase in terms of gift item sales.

July’s heatwave helped the DIY chain post its best half-year sales figures for at least 11 years in October, at 5.9 per cent, but analysts expect growth to ease to 2.5 per cent in the latest quarter.

Currys and PC World parent Dixons Retail, which also updates on Thursday, is poised to reveal a slowdown in sales growth as it comes up against tough comparisons from a year earlier after the demise of rival Comet.

UBS is forecasting UK like-for-like growth of 3 per cent in the group’s third quarter to 4 January, down sharply on the 12 per cent seen in the second quarter.

It believes margins will likewise have come under pressure, particularly from online price competition.